The Economist contemplates three advantages that could result from getting rid of cash in favor of electronic payments only ("with credit cards, mobile phones, and even watches"). It also mentions loss of privacy as a disadvantage.
According to this one possible advantage is as follows:
Getting rid of cash could boost the economy. Below-zero interest rates could encourage investment and might help to support the recovery. But when physical cash is around, negative interest rates are impossible: savers simply withdraw their savings. Get rid of physical money and the problem goes away, no one can avoid negative rates.
Are there any serious studies (e.g. books) that discuss possible effects of below-zero interest rates in more details? E.g., how would this tool differ from inflation, which currently seems to serve a similar purpose (and has similar effects in that is makes cash savings diminish in value)?
UPDATE I've meanwhile found some sources (still interested in more recommendations) here. There is also a fun proposal (thought experiment) for implementing negative interest rates even on physical money :)
It has been proposed that a negative interest rate can in principle be levied on existing paper currency via a serial number lottery: choosing a random number 0 to 9 and declaring that bills whose serial number end in that digit are worthless would yield a negative 10% interest rate, for instance (choosing the last two digits would allow a negative 1% interest rate, and so forth).
The new source also indicates that negative interest rates and (mild) inflation are indeed similar, but the second is (or was) simpler for governments to achieve (said John Maynard Keynes, no less): so simplicity of implementation is perhaps a part of the answer to my question.